This article specifically looks at the state of the wedding sector, but could be applied to many other activities suffering as a result of the Covid-19 restrictions.
The finances of wedding venues have suffered terribly since April 2020. Very few were able to open in 2020, except for a few weeks in late summer. Many in the sector had to put in hours of work re-scheduling weddings, only to have to re-schedule them again in 2021. Understandably, some couples asked for the return of their deposits, putting further cashflow strains on the business.
The wedding sector contributes over £14 billion to the UK economy each year. Caterers, wine merchants, florists and others have all seen a collapse in their businesses, as well as the venues themselves. Like many in the wider hospitality sector, income has completely dried up.
To some diversified businesses this is a marginal problem, but to others, corporate events and weddings are major contributors to farm and estate finances. Not surprisingly, in a number of cases banks are beginning to look seriously at the level of lending.
Yet these are often sound businesses. They simply have a temporary cashflow problem. There is massive pent-up demand in the wedding sector. All the income deferred for 2020 has been rolled over into 2021, in addition to the weddings already booked for 2021.
Income for 2021, provided constraints are lifted, may result in it being one of the most successful years ever for wedding venues, with 2022 also likely to perform well as many couples planning to marry in 2021 have chosen to defer a year. Certainly, the outlook for the next 18 months is very positive.
The Budget announced a Restart Grant up to £18,000 for the hospitality sector in England and no doubt the devolved governments will develop similar schemes.
Extended VAT deferral arrangements are also now available, but you need to apply by 19 March to obtain an 11 month staggered payment of VAT still outstanding from before 30 June 2020.
Finally, marketing could be important for events that may be allowed in the short-term using the venue’s facilities, such as pop-up restaurants, food home deliveries etc. Above all, regular communication with the business’s bankers will be critical. Not simply reports, but accurate cashflow forecasts and explanations for fluctuations.
Survival for the next three or four months is the overriding concern for venues, before it seems probable that Covid-19 restrictions will be lifted. Cash has been, and will continue to be, the problem.
The end is in sight but the next few months may be the most difficult for many – and that is not something that applies simply to the wedding sector.
The next step
We are here to help. To find out more about the recommendations made and how they may affect you, please contact our agriculture specialists, Nick Jenkins or call 01480 435525.